Presented by : Liz Perez Barletta, Esq.

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(1)

Presented by

:

Liz Perez Barletta, Esq.

Boston, MA | Cambridge, MA | Newton, MA

ebarletta@ligris.com

Licensed Attorney in The Commonwealth of

Massachusetts and in the State of Florida

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Why should I purchase/invest in real estate in the U.S.?

Do I need a Visa to do so? Can I get one by doing so?

What is the best kind of real estate purchase/investment for me?

Are there tax implications involved?

How should I take title to the property?

(3)

Why not!?

Historically, the U.S. has a more stable real estate market

compared to many other nations.

Real estate generally has a better return on investment than

stuffing money under a mattress (which is still a common

practice!) or depositing money in a bank.

Investing in the U.S. could be a path to obtaining a Visa and

(4)

NO, a Foreign National does not need a Visa to purchase real

estate in the U.S.

All that a Foreign National needs to purchase real estate in the

U.S., besides the desire to do so, is to have the ability to

transfer funds from her home nation to the U.S.

A Foreign National does NOT have to be in the U.S. for the

closing (i.e. by using Power of Attorney and document

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Investing in real estate could be a way to obtain Treaty Visa (E-1/E-2). For this to happen,

initially there must be a

treaty of commerce and navigation

between U.S. and National’s home nation.

E-1 Trader

: National must be coming to U.S. to conduct

substantial trade

(sizeable, continuous

exchange of goods/services/technology) principally b/w National’s home nation and the U.S.

E-2 Investor

: National must be coming to U.S. to develop/direct operations of a

bona fide

U.S.

enterprise (active undertaking producing services/goods for profit), in which she has made/will

make

substantial investment of capital

(substantial relating to cost of operations and sufficient to

ensure her commitment to enterprise; investment to be placed at risk (in commercial sense)

w/objective of profit)

Must show she

owns at least 50%

of enterprise or

has sufficient control

thereof (e.g. Manager).

Enterprise cannot be

marginal

(must have present/future capacity to generate more than

enough income to provide minimal living for National and her family).

Initial stay 2 yrs, possible ext. 2 yrs ea w/no max., must always intend to leave U.S. @ end.

How much to invest depends on many factors, but enough to show

substantial trade

or

substantial

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EB-5 Immigrant Investor

:

5

th

Preference of employment-based immigrant visas

Must invest in

new commercial enterprise

(est. after 11/29/90, or prior but modified to be “new”

Any

for-profit activity formed for ongoing conduct of lawful business

(e.g. sole prop., partnership, corp.).

Must

create/preserve at least 10 FT jobs for qualified U.S. workers w/in 2 yrs.

of EB-5 approval.

Direct job

(identifiable within enterprise)

Indirect job

(created as result of capital invested in enterprise affiliated with a

regional center

)

Can only be credited with preserving jobs in a

troubled business

Minimum investment capital: $1,000,000, or $500,000 if in high-unemployment or rural area

Capital is cash, equipment, inventory, tangible property, cash equivalents and indebtedness

secured by assets owned by the National, provided that she is personally and primarily liable

and that the assets of the new commercial enterprise upon which the petition is based are not

used to secure any of the indebtedness. (Investment capital cannot be borrowed!)

PROS: National is given permanent residence in the U.S.

CONS: Government requires U.S. citizens and U.S. residents pay taxes on worldwide income, so

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It depends!

How much do you have to invest?

Are you looking to buy a residence for yourself, or is the property solely for

investment/income purposes? Either way, are you seeking to obtain a Visa

by purchasing a property in the U.S.?

If its just for investment, do you want to actively manage the property or are

you more of a passive investor?

If you only have, $200,000 to invest, you’re looking at something small like a condo,

which is perfect for a passive investor. But if you have $1,000,000 to invest, your

investment could be more complex like several small homes or condos, or a small

apartment building, which may require active management.

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Again, it depends…

Are you a

Non-Resident Alien

(i.e. a person who is not a U.S. citizen

and who doesn’t pass the

green card test

or

substantial presence test

)?

Or are you a

Resident Alien

(i.e. a person who is not a U.S. citizen but

who does pass either the

green card test

or

substantial presence test

)?

Or are you a

Dual-Status Alien

(i.e. a person who changes status in a

current year from non-resident alien to resident alien or resident

alien to non-resident alien)?

DISCLAIMER: Any person/entity with tax-related questions should consult with a tax professional, such as a CPA or a tax attorney, for assistance. By presenting this slide, neither Liz Perez Barletta, Esq. nor the firm of Ligris & Associates, P.C. intends to be viewed or categorized as a CPA, tax attorney or other tax professional.

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Non-Resident Aliens

are subject to taxation generally only on

income generated in the U.S. (but in some circumstances, on

some

foreign source income

) and on estates/gifts based on U.S.

property/assets.

Resident Aliens

are subject to taxation in the same manner as U.S.

citizens (i.e. on any income, estate or gift worldwide).

DISCLAIMER: Any person/entity with tax-related questions should consult with a tax professional, such as a CPA or a tax attorney, for assistance. By presenting this slide, neither Liz Perez Barletta, Esq. nor the firm of Ligris & Associates, P.C. intends to be viewed or categorized as a CPA, tax attorney or other tax professional.

(10)

Regarding Estate/Gift Taxes…

Unlike Resident Aliens and U.S. Citizens, Non-Resident Aliens do not receive

a

lifetime gift tax exemption

(also called the

basic exclusion

, which is $5,340,000 as

of 2014), but are entitled to use the same

annual exclusion

($14,000 as of

2014). Every transfer of real and tangible property in the U.S. in excess of

said annual exclusion is subject to gift tax.

Non-Resident Aliens do receive an

estate tax exemption

of $60,000 (as opposed

to the aforementioned $5,340,000), unless there is an estate tax treaty

allowing a higher exemption amount.

If exemption limits are exceeded either by a Non-Resident Alien or a

Resident Alien, that Alien (or her heirs) will owe estate/gift taxes of up to

40%.

DISCLAIMER: Any person/entity with tax-related questions should consult with a tax professional, such as a CPA or a tax attorney, for assistance. By presenting this slide, neither Liz Perez Barletta, Esq. nor the firm of Ligris & Associates, P.C. intends to be viewed or categorized as a CPA, tax attorney or other tax professional.

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FIRPTA

: Foreign Investment in Real Property Tax Act of 1980

The disposition of a U.S. real property interest by a foreign person (transferor) is subject to

FIRPTA income tax withholding (disposition includes a sale or exchange, liquidation,

redemption, gift or transfer).

Purchaser (transferee) must withhold

10% of the amount realized

on the disposition (i.e. usually,

the amount paid for the property).

NOTE: Just because the buyer/transferee completes the required withholding does not mean that the

foreign person has satisfied her tax liability.

There are several exceptions to FIRPTA withholding, but notification requirements must be

met (see IRS website for more details).

DISCLAIMER: Any person/entity with tax-related questions should consult with a tax professional, such as a CPA or a tax attorney, for assistance. By presenting this slide, neither Liz Perez Barletta, Esq. nor the firm of Ligris & Associates, P.C. intends to be viewed or categorized as a CPA, tax attorney or other tax professional.

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Personally/Individually (consider personal tax implications)

Sole owner

With another as

Joint Tenants with Rights of Survivorship

(each joint tenant owns equal share

of the property, and if one tenant dies her interest automatically passes to surviving

tenant)

With another as

Tenants In Common

(each tenant in common can have a different

ownership interest, and if one tenant dies her interest passes to her heirs)

With another as

Tenants By The Entirety

(between husband and wife only, and if either

one dies that interest goes to surviving spouse)

Foreign LLC

LLC created in the U.S. takes title to the property, but the legal “Manager” of the U.S.

LLC is a foreign entity.

Could benefit from estate tax protection as property held this way is considered

property located outside U.S. jurisdiction, even though located in the U.S.

DISCLAIMER: Any person/entity with tax-related questions should consult with a tax professional, such as a CPA or a tax attorney, for assistance. By presenting this slide, neither Liz Perez Barletta, Esq. nor the firm of Ligris & Associates, P.C. intends to be viewed or categorized as a CPA, tax attorney or other tax professional.

(13)

It’s all about the

TEAM

:

Real estate agent/broker

Loan/mortgage officer

(shop around for best rates!)

Real Estate attorney

e.g. Liz Perez Barletta of Ligris & Associates, P.C.

And don’t forget to

T.I.E.

up loose ends…

T

ax Attorney (and/or CPA)

I

mmigration Attorney

Figure

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References

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